On December 5, 2024, FDA published a new draft guidance on accelerated approval providing a much needed and substantial update to its guidance on the pathway.  FDA’s application and use of accelerated approval has evolved dramatically since it was first developed by the Agency to help address the HIV/AIDS epidemic in the late 1980s.  Since that time, it was formalized in FDA regulations (21 CFR § 314 Subpart H) in 1992, codified in the Food, Drug, & Cosmetic Act by FDAMA (21 USC § 356(c)) in 1997, revised by FDASIA in 2012, and described in guidance, most importantly, in the 2014 Expedited Programs for Serious Conditions – Drugs and Biologics (“2014 Guidance”).  However, it has been recent circumstances, such as, reforms enacted by FDORA in 2022 (as well as FDORA’s requirement to publish new guidance; see HPM’s previous coverage here) and our observations of the evolving ways in which FDA has been applying its accelerated approval authority across a wide-range of areas of drug development that has driven our desire to see FDA provide new guidance on the topic.

The new draft guidance, Expedited Program for Serious Conditions — Accelerated Approval of Drugs and Biologics, is intended to replace much of the 2014 Guidance’s discussion of the topic.  However, the 2014 Guidance cannot be ignored entirely.  FDA’s interpretation of several threshold criteria for eligibility (serious condition, available therapy, unmet medical need) will continue to rely upon the 2014 Guidance.  What will be replaced and is described in more detail in the new guidance is (1) FDA’s overarching view of the pathway’s applicability, (2) interpretation of what constitutes an accelerated approval endpoint, that is, a surrogate or intermediate clinical endpoint, (3) the evidentiary standard for demonstrating that such an endpoint is reasonably like to predict clinical benefit, (4) recommendations and policies regarding confirmatory trials, and (5) the procedures governing the withdrawal of accelerated approval.  Despite including guidance on confirmatory trials and FDA’s authority to require them, the Agency decided to publish an additional guidance focused solely on how it is interpreting the authority to require that such trials “be underway prior to accelerated approval or within a specified time period after the date of accelerated approval.” As such, we will publish a separate blog post focused on confirmatory trials and how FDA is interpreting this key provision of its accelerated approval authority.

Background on Accelerated Approval

The key concept, an ingenuity of FDA itself that has been around since the beginning of accelerated approval, is to allow earlier access to a promising therapy for a serious condition with an unmet medical need based on an endpoint that is reasonably likely to predict clinical benefit.  Accelerated approval endpoints can take one of two forms: (1) a surrogate endpoint that is reasonably likely to predict clinical benefit or (2) a clinical endpoint that can be measured earlier than irreversible morbidity or mortality (i.e., an intermediate clinical endpoint) and that is reasonably likely to predict an effect on irreversible morbidity or mortality or other clinical benefit.  Whether a surrogate or intermediate clinical endpoint (ICE), the endpoint to support accelerated approval is one that can be assessed more rapidly than the ultimate clinical benefit; this is what enables earlier patient access than would be possible while generating the evidence to support a traditional approval, which is typically infeasible.  Such clinical benefit is defined as “a positive therapeutic effect that is clinically meaningful in the context of a given disease,” is supported by a positive benefit-risk profile, and is, generally, a measure of how a patient feels, functions, or survives.

The FDCA requires that FDA also consider the “severity, rarity, or prevalence of the condition and the availability or lack of alternative treatments” when determining whether a program meets criteria for accelerated approval.  It also gives FDA authority to require that the sponsor conduct one or more postapproval studies to verify and describe the predicted effect on clinical benefit, to require pre- and post-approval submission of all promotional materials, and, in certain circumstances, to withdraw approval using expedited procedures for products approved via accelerated approval.

The most recent statutory reforms gave FDA additional authority to set conditions for postapproval studies, such as enrollment targets, the study protocol, and milestones for study conduct and completion, in addition to creating a new obligation for sponsors to submit 180-day progress reports on meeting their postapproval study conditions.  These reforms also gave FDA authority to require that postapproval studies be underway at the time of approval, expanded FDA’s enforcement authority to include failure to comply with the postapproval study conditions and reporting requirements, and laid out the procedures for expedited withdrawal.  Lastly, the reforms enacted by FDORA required that FDA publish guidance on early consultation with FDA to identify novel surrogate or intermediate clinical endpoints, use of novel trials designs for postapproval studies, the expedited withdrawal procedures, and considerations related to the use of surrogate and intermediate clinical endpoints.  FDA’s December 5, 2024 draft guidance on accelerated approvals appears intended to cover each of these topics even if not by dividing them precisely along those lines.

FDA’s Overview of When Accelerated Approval is Appropriate

The new draft guidance explains, that there are two circumstances in which the accelerated approval authority would most clearly apply: (1) when the course of the disease is long or (2) the clinical event that is relevant for demonstrating benefit occurs infrequently.  While these examples could be interpreted to mean that the key consideration is the amount of time needed to accumulate enough evidence of benefit, FDA’s authority does not limit use of accelerated approval only to such circumstances. The new guidance states, for instance, that “accelerated approval may be considered where an effect on a surrogate endpoint could be shown in a smaller number of patients” than would be required to show an effect on a clinical outcome. To us, FDA’s application of accelerated approval in numerous other instances, such as benznidazole for Chagas disease, Oxbryta for sickle cell disease, Qalsody for SOD1 ALS or Kebilidi for AADC deficiency, demonstrate that, while accelerated approval determinations are highly circumstance specific, the authority can apply to a wide-range of development pathways and disease areas.

Moreover, it was also interesting to see how FDA discussed the concept of unmet medical need in the limited fashion that it did in this new guidance. As noted earlier in this post, the new guidance is intended to replace previous guidance in most respects except that FDA’s interpretation of what constitutes a serious condition, available therapy, and an unmet medical need will continue to rely upon the 2014 Guidance. However, while FDA reiterated its interpretation that the statutory requirement to take “into account . . . the availability or lack of alternative therapies” and the regulatory requirement that the drug provides “a meaningful therapeutic benefit over existing treatments” means that accelerated approval is only available to therapies that address an unmet medical need, it chose to highlight one telling example of how a sponsor might satisfy this criteria even when there are available therapies – when the new therapy has similar efficacy but a different mechanism of action compared to the available therapies.

This nod to innovation stands as something of a reminder to sponsors to not ignore disease areas simply because treatments exist and that expedited pathways are still available to those willing to pursue new therapeutic modalities and approaches.  This may also help to derisk parallel product development amongst multiple products for the same condition, where another product in development may gain traditional approval or another product already on the market under accelerated approval may confirm clinical benefit prior to completion of clinical trials to support accelerated approval (e.g., in Duchenne Muscular Dystrophy).  It will be important for FDA to communicate to sponsors its views on whether a product would address an unmet medical need on mechanistic grounds to help ensure greater certainty for investment in the development of therapies for these serious conditions.

On the other hand, sponsors must be aware of several limitations articulated by FDA that may prevent or limit the use of accelerated approval.  First, patients may be exposed to safety risks from a drug that subsequently fails to demonstrate clinical benefit.  Second, given the potential for reliance upon smaller or shorter clinical trials (than would be typical for traditional approval), there may be less information at the time of approval about rare or delayed adverse events.  Third, accelerated approval should not be considered if the completion of an adequate and well-controlled postapproval clinical trial to verify and describe the clinical benefit is infeasible.  Each of these risks and considerations will influence FDA’s decision-making with respect to accelerated approval.  Moreover, the infeasibility of conducting an adequate and well-controlled postapproval clinical trial becomes ever more important because FDA has authority to withdraw an accelerated approval using expedited procedures if the sponsor either fails to conduct the study with due diligence and according the conditions stipulated by FDA, or that study fails to verify the clinical benefit of the product.

FDA’s recommendation to sponsors for how to handle such risks will sound like something of a common refrain (and for good reason) at this point – communicate with the Agency early and often during development.  In particular, the guidance states that sponsors should discuss (1) potential eligibility, (2) proposed surrogate or intermediate clinical endpoints, (3) clinical trial designs, and (4) the planning and conduct of confirmatory trials.  Notably, FDA in this guidance was quite keen to convey their concern that sponsors not overlook the importance of the postapproval confirmatory studies, reemphasizing in a footnote following these recommendations that the “accelerated approval pathway will not be an option for every serious disease with an unmet medical need, particularly when evidence is insufficient to support use of a surrogate endpoint or intermediate clinical endpoint, or when an adequate and well-controlled confirmatory trial would be infeasible” (emphasis added).

Accelerated Approval Endpoints and Evidentiary Criteria to Support Accelerated Approval

As noted above, the endpoints for accelerated approval can fall into one of two categories – a surrogate endpoint or an intermediate clinical endpoint, either of which must be reasonably likely to predict clinical benefit to support an accelerated approval. Moreover, an application (NDA or BLA) based upon a surrogate or intermediate clinical endpoint seeking accelerated approval must still meet the substantial evidence of effectiveness standard and contain sufficient information to demonstrate that the drug is safe for use under the conditions of the proposed labeling. However, as the new guidance helps to explain the additional burden of accelerated approval is to provide “adequate evidence” that the endpoint is reasonably likely to predict clinical benefit and goes on to provide a number of factors for sponsors to consider.

For those somewhat familiar with accelerated approval and surrogate endpoints, you will find that the guidance reiterates a now well-established framework. Surrogates are generally biomarkers, such as laboratory, radiographic, imaging, physical, or other measures that are thought to predict benefit but are not inherently measures of clinical benefit. Surrogates fall into one of three categories in terms the strength of the evidence to support their predictive capacity:

1. validated surrogates (e., one that is known to predict clinical benefit and could support traditional approval);
2. reasonably likely surrogates (e., one that is reasonably likely to predict clinical benefit and could support accelerated approval); and
3. biomarkers that do not qualify as either (e., markers for which there is insufficient evidence to demonstrate is predictive capacity or simply lack predictive capacity based upon the available data).

In contrast, FDA articulated its most detailed guidance to date on the use of; intermediate clinical endpoints (ICE). Beyond reiterating the key criteria, a clinical endpoint that can be measured earlier than irreversible morbidity or mortality (IMM) and is reasonably likely to predict an effect on IMM or other clinical benefit, the new guidance states that there is a “threshold” consideration before relying upon an ICE. FDA will consider “whether the demonstrated therapeutic effect on the [ICE] alone would be a basis for traditional approval” because accelerated approvals based on an ICE will be considered “only when it is critical to confirm the effects on IMM or other clinical benefit” (emphasis added). The new guidance provides two examples of when an ICE may be appropriate:

1. following demonstration of “a short-term benefit in a chronic disease [but] a longer duration of effect is necessary to demonstrate a clinically meaningful benefit,” and the short-term benefit is reasonably likely to predict “a longer duration of effect;” and
2. the ICE demonstrates clinical benefit on a “less serious or earlier symptom of serious disease, but the benefit observed is anticipated to predict a favorable disease outcome.”

Notably, the first example provides clarity about a long-standing point of confusion regarding accelerated approval using an ICE – that is, the same clinical measure (captured at two different timepoints) can serve as both the ICE (accelerated approval endpoint) and as the measure of ultimate clinical benefit (traditional approval endpoint). While examples of this approach are uncommon, it stands out to us that FDA included this example in its guidance. Of note, the 2004 accelerated approval of natalizumab (Tysabri) for relapsing-remitting multiple sclerosis was based on the Kurtzke Expanded Disability Status Scale (EDSS) score at one-year; two-year EDSS data were used to verify and describe the clinical benefit for conversion to traditional approval. Further, the recent approval of Kebilidi for AADC is likely to follow this approach, suggesting that FDA may be gaining some comfort with type of ICE-clinical benefit relationship.

Regardless of the type of endpoint, surrogate or ICE, the critical consideration for FDA and sponsors will be whether there is “adequate evidence” that the endpoint is reasonably likely to predict clinical benefit. The new guidance goes on to describe that such determinations will (of course) “be a matter of judgment that will depend on the biological plausibility of the relationship between the disease, the endpoint, and the desired effect, and the empirical evidence to support that relationship.” Such empirical evidence may come from a variety of sources, such as epidemiological, pathophysiological, therapeutic and pharmacologic, but it is not limited to such sources should new innovative methods or tools provide supportive empirical evidence.

The guidance goes on to warn that “pharmacologic activity alone” cannot provide adequate evidence and that clinical data “should be provided.” FDA’s use of “should” here is interesting because the guidance also stated that in the context of certain rare disease development programs (e.g., gene therapies) “where there is (sic) data supporting a relationship between the therapeutic target and the surrogate” clinical data may not be necessary. FDA could, for instance, decide that the “totality of the evidence” (which may include compelling nonclinical data) may be sufficient to determine that a surrogate endpoint is reasonably likely to predict clinical benefit.  This may represent an important difference in the application of accelerated approval between CDER and CBER, as many therapeutic approaches regulated by the drug center have similarly targeted mechanisms to traditional gene therapy but are not mentioned (e.g., antisense oligonucleotides, small interfering RNA).

Irrespective of disease area, FDA will consider “all relevant evidence and may consult external experts” or convene an advisory committee when deciding whether the available evidence supports the relationship between the accelerated approval endpoint and clinical benefit. FDA considers the strongest supportive evidence to be data from interventional studies showing that “the extent of change” in the surrogate correlates with “the extent of improvement” in the measure of clinical benefit. However, the guidance acknowledges that such data may be unavailable in certain settings, such as for rare diseases. For such cases, other sources of information, including nonclinical animal data, epidemiological data, and other clinical data will be considered “to determine if the convergence of evidence supports” the endpoint as reasonably likely to predict clinical benefit.

Finally, FDA provided several factors it considers important to consider:

1. How well understood is the relationship between the pathophysiology of the disease and the surrogate endpoint.
2. How reliable and consistent is the epidemiological evidence supporting the correlation between the surrogate and the clinical outcome.
3. Has the predictive relationship between the surrogate and clinical benefit been demonstrated in an interventional clinical trial previously, and whether the intervention was in the same or a closely related pharmacologic class.
4. Does the relationship between the surrogate and the clinical outcome require achieving a certain magnitude or duration of effect on the surrogate to predict a clinical benefit (or is otherwise necessary to support a favorable benefit-risk assessment).

A Few Concluding Thoughts

As we noted in a few places throughout this post, FDA’s new guidance frequently acknowledges that some flexibility or adjustments to the evidentiary bar may be necessary and warranted in the context of rare diseases. Repeatedly, the guidance stressed that accelerated approval determinations are case-by-case and circumstance-specific. Our experiences and observations of this space further underscore each of these points. However, we were pleased to see FDA acknowledge, explicitly in the context of rare diseases and implicitly in the context of common diseases, that deciding whether the evidence supports a determination that an endpoint is reasonably likely to predict clinical benefit can be based on a totality of evidence approach. In the context of common diseases, FDA may require more and stronger interventional data showing “the extent of change” on the accelerated approval endpoint correlates with “extent of change” in the measure of clinical benefit but nonetheless appears to acknowledge in this new guidance that other information can supplement such data in a meaningful way.

We were also excited to see FDA provide more explicit discussion of ICEs than had been included in previous guidance. That being said, the guidance does leave some ambiguity with respect to what extent FDA’s discussion of the evidentiary criteria applies solely to surrogates or can reasonably be extrapolated to ICEs as well. This portion of the guidance begins by discussing both surrogates and ICEs collectively or simply refers to “an endpoint that is reasonably likely to predict.” However, as the guidance turned to more specific factors and detailed discussion, the focus changed to surrogate endpoints. While we are disappointed by this potential ambiguity, it is our experience that much of FDA’s discussion of the evidentiary criteria can apply to both surrogates and ICEs, with the important caveat that each determination is circumstance-specific.

FDA’s new accelerated approval guidance is a must read. The discussion provides a wide-ranging and much needed update on FDA policies and interpretation of its accelerated approval authorities. Moreover, given its rich and exciting content, it is a topic we expect to return to time and again.

Want to Hear More about Accelerated Approval?

This blog post focused largely on the selection and justification of suitable endpoints for accelerated approval, as well as a discussion of the broader context where accelerated approval would be appropriate.  Undergirding the program is timely initiation and completion of confirmatory studies, which serves to limit the extent of patient exposure to drugs that may not ultimately demonstrate clinical benefit.  FDA intends to use its new statutory authorities under FDORA to set conditions for accelerated approval related to confirmatory studies, including that such studies may be required to be “underway” prior to approval.  Failure to meet these conditions may prevent approval or result in withdrawal of the accelerated approval.  Shortly after publishing the draft guidance that is the subject of this blog post, FDA published a second draft guidance that provides further context to considerations for determining whether a confirmatory trial is “underway” prior to approval, which we will cover in a subsequent blog post.

This is the first in a series of blog posts on tips for successfully handling an FDA inspection.  Using publicly available examples, these “lessons” will illustrate potential pitfalls and strategies for interacting with FDA during and after an inspection.  

Although FDA has long taken the position that it has broad authority in how it conducts its inspections, it was not until 2012 that Congress put some teeth behind FDA’s policy position.  As part of the Food and Drug Administration Safety and Innovation Act (known as FDASIA) and later under the FDA Reauthorization Act of 2017 (known as FDARA), a drug or medical device can be deemed adulterated if a regulated company “delays, denies, or limits an inspection, or refuses to permit an entry or inspection.”  FD&C Act § 501(j).  A foreign food manufacturer that “refuses to permit entry of [FDA inspectors} to inspect such factory, warehouse, or other establishment” can be subject to an import alert under section 807(b) of the FD&C Act.

But what exactly constitutes delaying, denying, limiting or refusing an FDA inspection?  FDA has published Guidance defining examples of circumstances applicable to a drug or medical device company, as well as separate Guidance applicable to foreign food manufacturers.   Much of the debate on this issue centers on whether FDA can take photographs during an inspection (see our previous blog post).  But a recent Warning Letter raises new questions for regulated companies on whether FDA can interview company employees, and if so, how companies should handle these requests during an inspection.

On December 17, 2024, FDA issued a letter to Brands International Corporation, a drug manufacturer located in Ontario, Canada, citing it for limiting and delaying FDA’s inspection based on the following conduct:

• The Quality Manager “shoving and shouting at our investigators for conducting the inspection without [his] presence”
• Laboratory staff refusing to open a drug stability chamber “based on [the Quality Manager’s] hostile behavior”
• Upon FDA asking questions of the Quality Control Supervisor, the Quality Manager “interrupted and stated that only he can explain and answer the requests”
• While FDA was interviewing an employee regarding mold samples, the Quality Manager “began berating the employee, who then left the room”

Although delaying, denying, limiting or refusing the drug inspection was not the only violation cited in the Warning Letter – it also included several cGMP violations and potential cosmetic violations – the “limiting the inspection” violation was listed first, and thus considered by FDA to be the most significant violation.

Very rarely have we seen a Warning Letter call out the behavior of a single individual, and no less the Quality Manager, who is the public face of the company to FDA during inspections, for being uncooperative and hostile to FDA and the company’s own employees.  Here, the FDA investigators documented several instances in which the Quality Manager appeared directly responsible for preventing company employees from talking with FDA about their responsibilities or responding to direct questions from FDA about areas in which FDA has authority to inspect.  Note that the relevant Guidance document for drug manufacturers (like Brands International) is silent on the issue of employee interviews, but the Guidance applicable to foreign food manufacturers is explicit that FDA considers a company to have refused an inspection if it acted unreasonably in preventing the FDA investigator from talking to pertinent staff to collect evidence.

Examples of where we would generally consider preventing the FDA investigator from fully conducting an inspection include:

. . .

The owner, operator, or agent in charge refuses to allow the FDA investigator to collect evidence to document potential violations (e.g., to take photographs as necessary; to collect samples; talk to pertinent staff; or to collect food labels and labeling).

FDA Guidance, at 8 (emphasis added).  Now, guidances are generally not legally binding, unlike statutes or regulations.  But because this Guidance was specifically authorized by statute, it may carry more weight in a court.

To be clear, FDA cannot coerce employees to testify during an inspection – certainly every Law & Order fan is familiar with the Constitutional right to remain silent – and there is at least some doubt as to the Agency’s legal authority to interview any employee it wants during an inspection.   But it appears FDA will assert that it has a right to question employees, presumably under the statutory provisions cited above, and FDA has the leverage (even if not explicit legal authority) to pressure companies to make their employees available.

How should FDA-regulated companies handle interview requests during an FDA inspection?  As a practical matter, we recognize there are few FDA-regulated firms that are ready and willing to contest the Agency in court over this issue.  (If so, please call us.)  There are tactful ways to accommodate FDA’s request and set appropriate limitations to ensure FDA does not overstep its inspectional mandate.  First, companies should designate the personnel who are authorized to respond to FDA’s questions during an inspection.  Written procedures should clearly state parameters for discussions with FDA, including prohibiting FDA from conducting a private interview with an employee who is not properly designated.  If FDA asks for an interview of a non-designated employee, companies can still be cooperative with the request but insist that designated personnel are present during those interviews and that FDA limit its questions to those that are directly within the employee’s job description and responsibilities.  Wholesale refusal to allow an employee to respond to direct questions from FDA only raises more questions and distrust from the FDA investigator.  Even if not cited in a Warning Letter, the FDA investigators are instructed to document in their Establishment Inspection Report incidents of hostile or uncooperative interviewees (see Investigations Operations Manual, at section 5.3.13), which can be publicly released.   Companies should train (and remind) employees on inspection readiness.

So Lesson #1, companies can control the extent in which FDA talks with personnel, but should do so based on established procedures and a cooperative attitude.

Whether a patent can be listed in the Orange Book is a critical issue for both brand and generic manufacturers, and, of particular interest in the last few years is whether patents claiming just the device constituent of a combination product is eligible for listing.  While mums the word from FDA, the FTC has some strong opinions on the issue.  And both the First Circuit and the District Court for New Jersey have weighed in.  Now, the arbiter of all things patent, the Federal Circuit, has made the most definitive statement yet, holding that:

To list a patent in the Orange Book, that patent must, among other things, claim the drug for which the applicant submitted the application and for which the application was approved. And to claim that drug, the patent must claim at least the active ingredient. Thus, patents claiming just the device components of the product approved in an NDA do not meet the listing requirement of claiming the drug for which the applicant submitted the application.

The background of this case is pretty simple.  Teva is the sponsor of ProAir® HFA, indicated for the “treatment or prevention of bronchospasm with reversible obstructive airway disease in adults and children 12 years of age or older.”  Nine patents are listed in the Orange Book with ProAir HFA.   Amneal filed an ANDA seeking approval to market a generic and filed Paragraph IV certifications for those 9 patents; Teva sued Amneal for infringement of 6 of those patents—later amended to 5—and triggered a 30 month stay.  But because the patents at issue relate to the dose counter of the device constituent, Amneal filed antitrust counterclaims, counterclaims for declaratory judgment of noninfringement and invalidity, and counterclaims seeking an order requiring Teva to delist the five patents that it asserted against Amneal.  Amneal alleged that but for those device patents, only Paragraph I certifications would have been filed and no 30-month stay would have been imposed.   Teva moved to dismiss and Amneal moved for a judgment on the pleadings.  The District Court granted Amneal’s motion and ordered Teva to delist the 5 patents because the patents “are directed to components of a metered inhaler device, but do not claim or even mention albuterol sulfate or the ProAir® HFA.”  Teva appealed to the Federal Circuit, and the Federal Circuit stayed the District Court’s delisting order pending resolution of the case.

On appeal, Teva argued that a patent must be listed in the Orange Book if the claimed invention is found in its product.  Because ProAir HFA contains features claimed by the patent—the dose counter and canister—Teva argued that its patents were properly listed in the Orange Book.  Teva asserted that a patent “claims the drug” as long as the NDA drug product infringes that claim; in other words, “claims” means “infringes”.  Teva also argued that the Federal Food, Drug, and Cosmetic Act’s definition of “drug” includes the device component.  The Court rejected both these arguments “as allowing for the listing of far more patents than Congress has indicated.”

In short, the Court held that a patent does not claim the drug just because it reads on the approved drug product.  Instead, “a patent claims the drug when it particularly points out and distinctly claims the drug as the invention.”  Therefore “to qualify for listing, a patent must claim at least what made the product approvable as a drug in the first place—its active ingredient.”  The fact that a product could infringe a patent does not mean that the patent “claims” the drug.

The Court then moved to Teva’s second argument: that a patent is listable if it claims any part of the combination product.  The Court rejected this argument because, essentially, the device component is not part of the drug.  The Court explained, citing to Genus, that the fact that FDA approved the combination product as a drug does not make the device constituent a drug; that is, a combination product is not a drug, as the drug and device constituents retain their identities as drugs or devices.  “[I]ncluding a drug in a combination product does not transform each and every component of that combination product into a drug.”

In short, “to qualify for listing, a patent must claim at least the active ingredient in the application and the approved drug product.”  Nevertheless, it’s unclear whether this decision, despite its definitiveness, will have the effect of pressuring combination product sponsors to delist their device patents.

Ultimately, this case brings us to the question “what’s in a claim?”  In the context of listing patents in the Orange Book, the Federal Circuit has decided that the answer must be the active ingredient.  We’ll see what FDA and industry does with that.

As promised in the Fall Unified Regulatory Agenda, FDA issued the final rule to establish the pathway to obtain marketing approval of a nonprescription drug product with an additional condition for nonprescription use (ACNU) on December 26, 2024, before the end of the calendar year.  89 Fed. Reg. 105288 (Dec. 26, 2024).  We described the 2022 proposed rule and the ten-plus year history leading up to its issuance in our blog post here.

In response to the proposed rule, approximately 200 comments were submitted to the docket, and a meeting took place among FDA, the White House Office of Management and Budget (OMB) and the Consumer Healthcare Products Association (CHPA).  The changes made in the final rule were minimal and notably did not address two of the biggest subjects of substantive comments to the proposed rule.

Turning first to the four areas in which changes were made, the focus of two of those areas were the requirements for the required labeling statements for a product approved with an ACNU.  The third was the postmarketing requirement for reporting an “ACNU failure.” In discussing these revisions, FDA clarified that an ACNU failure must be reported even if the failure does not cause or lead to inappropriate medication use or consumer harm.  FDA also stated in response to comments that questioned FDA’s authority to require such reports in the absence of an adverse drug experience, that “ACNU failures generally would have a bearing on whether the Agency may consider withdrawal proceedings pursuant to section 505(e) of the FD&C Act.”

Finally, FDA revised language in the final regulation about the circumstances under which a drug product with an ACNU would be misbranded – though it is not clear that the language actually clarifies all that much.  The regulation now reads that a nonprescription drug product with an ACNU is misbranded if it is mislabeled or if the “ACNU is not implemented by the applicant in accordance with the following, as approved by FDA in the application: (i) The key elements [of the NDA or ANDA]; or (ii) The operationalization of the ACNU under [the NDA or ANDA].”  It is not obvious from this language what happens in the case of consumer error or consumer intentional misuse of the ACNU.  In either case, if the consumer wrongly enters their information, e.g., and as a result obtains a drug that had they entered the information correctly, they would not have received, does that make the drug misbranded and the drug manufacturer responsible for distributing a misbranded drug? Further elaboration of FDA’s view would be helpful.

We turn now to the two biggest issues that FDA declined to make changes to address: (1) whether allowing a prescription version and a nonprescription version of the same drug product with the only difference being the nonprescription drug’s having an ACNU violates FDA’s long-held policy against the simultaneous marketing of prescription and nonprescription drug products, and (2) the “fail first” approach to eligibility to submit an ACNU application.

FDA’s policy has prohibited the simultaneous prescription and OTC marketing of the same drug product under the same conditions of use unless there is a clinically meaningful difference between them.  Historically, this has meant a difference in dose, strength, indication, etc. The difference could be as subtle as how long the drug could be used for, e.g., up to 7 days versus chronic use.  FDA’s position expressed in the preamble is that if the only difference is the existence of the ACNU (i.e., all those other conditions are exactly the same), that is enough of a meaningful difference to allow simultaneous marketing.  This is one of the issues on which there were significant comments and was one of the topics of the meeting with OMB.

Interestingly, in the preamble, FDA also said that it would require a separate application rather than a supplement for an OTC switch involving an ACNU because if the ACNU switch of an RLD were approved, then all prescription generics referencing that RLD would be required to submit supplemental applications to switch their products from prescription to nonprescription with ACNU status, potentially removing all prescription products from the market and leavings only drugs that can be accessed via an ACNU on the market. In making this statement, FDA noted that this result would be counter to the purpose of the ACNU program of expanding access because there may be individuals who are not able to access the OTC drug because of their inability to navigate the requirements of the ACNU.  At the same time, if the RLD prescription drug and its generics have gone away, these individuals would not be able to obtain the medication by prescription from their healthcare provider.  This approach by FDA to trying to maintain a prescription option on the market seems to raise some significant issues that we may not have seen the last of.

Commenters, including CHPA, also raised concerns and provided comments on FDA’s “fail first” approach which requires that FDA determine that labeling alone is insufficient to ensure appropriate self-selection or appropriate actual use, and that the applicant provide adequate data or other information to demonstrate this, before it will accept an application for an OTC drug with ACNU. Numerous comments asked for clarifications or standards which FDA declined to provide, instead advising applicants to meet with FDA to discuss their development plans and recommending a step-wise approach to development which may include an iterative process.  While this is certainly the process undertaken by all nonprescription drug label developers to create a drug facts label that can meet the criteria for being able to provide directions for safe and effective use, proving a negative and testing against no standard poses significant challenges for which there are no precedents.  FDA did not acknowledge this concern speaking instead of the need of “optimizing” the label without more direction on how to determine when optimization is achieved.

Now that the ACNU rule is final, we eagerly await that first approval or first Advisory Committee meeting where we can all learn how FDA will apply some of the vaguer parts of this long-awaited program.

The final rule becomes effective on January 27, 2025.

As we previously reported in 2022, FDA published a proposed rule defining  the nutrient content claim “healthy.”  The proposed revised rule constituted a radical change from the original definition of healthy, which focused on the presence of individual (beneficial) nutrients.  In contrast, the 2022 proposed redefinition focused on food groups recommended by nutrition science and the Dietary Guidelines (DGs), 2020-2025.  Nutrients come into play only where it concerns nutrients to limit (NTL), i.e., added sugars, saturated fat, and sodium.

FDA received more than 400 comments, resulting in a final rule published on December 27, 2024, covering more than 100 pages.

The final rule maintains the concept of the proposed rule.  However, FDA made several changes in the proposed food groups equivalents and NLT criteria; these changes are based on FDA’s review of the marketplace in response to comments.  FDA revised certain criteria providing more flexibility and resulting in additional foods qualifying for “healthy” consistent with nutrition science and the DGs, including:

• Criteria for foods with small reference amounts customarily consumed (RACCs) – Comments had noted that foods with small RACCS were not eligible for the healthy claim even though they were the type of foods recommended by the DGs. FDA revised the rule to provide that the ‘‘healthy’’ criteria apply to individual foods with a RACC of 50 g or less, or 3 Tbsp or less, on a per 50 g basis instead of on a per RACC basis. Consequently, several foods consumed in small amounts recommended for healthy dietary patterns now qualify for the healthy claim.
• Exemption for raw, whole fruits and vegetables – Another issue FDA reconsidered is the exemption for raw whole fruits and vegetables from the NTL criteria.  Under the proposed rule, any raw whole fruits and vegetables could be labeled healthy no matter the level of added sugars, sodium, or saturated fat.  The final rule does not limit this exemption to only raw fruits and vegetables.  Instead, the exemption from the NTL criteria now applies to an individual food, or a mixed product that is comprised of one or more of the foods recommended by the DGs (i.e., vegetables, fruits, whole grains, fat-free and low-fat dairy, lean meat, seafood, eggs, beans, peas, lentils, nuts, and seeds), that contains no added ingredients other than water.
• FGE criteria – FDA also reconsidered the criteria for various food group equivalent (FGE) criteria, e.g., the FGE for dairy was reduced from ¾ cup to 2/3 cup, and for combination foods, each food group must have no less than ¼ FGE (instead of the proposed ½ cup FGE) and the combined amount of two or more FGEs must be at least 1 total FGE, e.g., if the product contains 2 food groups and ¼ FGE of one food group, it must contain at least ¾ FGE of another food group. The increased flexibility for FGE requirements will result in more products being able to meet the FGE requirements for combination foods.
• Nutrients to limit (NTL) – FDA revised the values for NTL for certain food groups because the proposed (lower) limits would disqualify many products recommended by DGs from the healthy definition. Among other things, FDA
  • Increased the limit for sodium in mixed products from 10% DV to 15% DV per RACC;
  • Increased the limit for added sugars for the grain group from 5% DV to 10% DV (FDA did not increase the added sugars limit for dairy products as, based on market review, yogurts and other dairy products containing 5% DV or less added sugars were available and palatable);
  • Excluded the inherent saturated fat in seafood from the saturated fat limit for seafood products and lowered the saturated fat limit for seafood products to 5% DV to provide more flexibility for seafood, which has a fat profile that is predominantly beneficial unsaturated fats but has amounts of naturally occurring saturated fat that can vary across and within different types of seafood; and
  • Streamlined the NTL criteria so that there is one limit each for saturated fat, sodium, and added sugars for mixed products, main dishes, and meals.
• Plain water and plain carbonated water – FDA proposed that plain water and plain carbonated water qualify as healthy. The final rule expands this category to cover all water, tea, and coffee with less than 5 calories per RACC and per labeled serving, including any of these products containing non-caloric ingredients such as flavors, no- or low-calorie sweeteners, vitamins, and minerals.  This category does not include diet sodas, however.
• FDA did not create separate criteria for dietary supplements to qualify as healthy. As discussed in the preamble, several comments asked FDA to exempt dietary supplements from the healthy claim requirements.  FDA refused to do so, referencing the statement in the proposed rule that “good nutrition does not come from intake of individual nutrients (as dietary supplements often provide) but rather from foods with their mix of various nutrients working together in combination.”  The purpose of the healthy claim is to highlight foods that are useful in creating a healthy diet that includes foods from several different food groups.  As discussed in the preamble, FDA recognizes that, although most dietary supplements may not qualify as healthy, some may.
• Important in the context of private litigation in which the issue has come up, FDA acknowledges that the term “healthy” is a nutrient content claim only when the term is used in a nutritional context and not when it is used in a structure/function claim or health claim.

Recognizing that the final rule redefining the term “healthy” is a significant change from FDA’s previous approach (in effect for thirty years), FDA plans to issue guidance documents intended to help industry understand the rule and how to work with FGEs.  FDA also plans to host a stakeholder webinar on the final rule at a later date.  It already published several resources regarding the final rule (e.g., “Updated ‘Healthy’ Claim – Factsheet” and examples of “Products that Now Qualify for Healthy under the Final Rule”).

An important aspect of the new definition of healthy is that for many foods it will be difficult (or impossible?) to determine if the product indeed meets the definition of healthy, as it usually will not involve analysis of the foods.  Therefore, manufacturers must maintain records for foods bearing a “healthy” claim unless it is clear from the food’s mandatory labeling information. Records must be kept for at least two years after the food is introduced or delivered for introduction into interstate commerce.

FDA continues its work on the development of a symbol that manufacturers could use on food labeling to show that a product meets the definition of “healthy.” FDA believes that such a standardized graphic will further support FDA’s goal of helping consumers identify food products that can be the basis of healthy eating patterns consistent with the DGs.

The final rule is effective 60 days from December 27, 2024, i.e., February 25, 2025.  The compliance date is February 25, 2028.

Since the induced infringement finding in GSK v. Teva, the generic industry has feared the death of the skinny label (admittedly stoked by alarmist headlines like my own, see Ding Dong is the Skinny Label (Effectively) Dead?).  This is because, at a minimum, if a skinny-labeled generic is the basis for induced infringement liability, generic manufacturers will certainly think twice about using the skinny label process and still calling themselves AB-rated, which ultimately would lead to less reliance on the skinny label, leaving the statutory skinny label provision to do very little.  Enter Congress.

Senators John Hickenlooper, Tom Cotton, Peter Welch, and Susan Collins recently introduced the bipartisan Skinny Labels, Big Savings Act, which would amend federal patent infringement law so that generic drug manufacturers can:

1. Submit or seek approval of a skinny label for a generic or biosimilar pharmaceutical product;
2. Include labeling, promotional materials, or commercial marketing, consistent with the Federal Food, Drug, and Cosmetic Act regulations, for a drug with skinny labeling approved by the FDA;
3. Describe, consistent with the Federal Food, Drug, and Cosmetic Act, a drug approved via skinny label as a generic of or therapeutic equivalent to the branded drug. .

The sponsors describe it as a “safe harbor” in a one-page explainer on the bill available here.

More specifically, the bill states that these activities “shall not be acts of direct, induced, or contributory infringement of a method of use claim in a patent” listed in the Orange Book.  The safe harbor applies only when the labeling, promotion, or commercial marketing does not reference the condition(s) of use claimed in the patent.  And though induced infringement through skinny label has not yet been an issue with biosimilars and interchangeable biosimilars, the bill seeks to stop any more trouble before it starts.  It applies the same limitation on induced infringement to applications under 351(k) of the Public Health Service Act.  Importantly, the bill applies to conduct that occurs “before, on, of after” enactment of the Act.

This bill would go a long way to alleviating the concerns of the generic industry (AAM has applauded it), but it will clearly have objections from the brand side.  It has a long way to go through the machine that is Congress, but we’ll be watching to see if the skinny label will, in fact, be safe.

The Winter Solstice, signifying the shortest day of the year, was Saturday, December 21.  Although the earliest sunset of the year was actually in early December, this day also marked another premature sunset – the beginning of the end of the rare pediatric disease priority review voucher program.

As we blogged recently, the program has had scheduled sunset dates from its very beginning, which have been repeatedly extended.  The first sunset date is the authority to grant a priority review voucher to a rare pediatric disease product application for a drug that has not been designated as a drug for a rare pediatric disease.  Although such designations are not typically a prerequisite for a voucher, the law is drafted so that once this first sunset date has passed, only designated programs may receive priority review vouchers for rare pediatric diseases until the program sunsets completely.  As we mentioned in our blog post, this first sunset date was originally in September, but was given a brief reprieve until December 20, 2024, as part of a continuing resolution to keep the government funded until that date.

As December 20 approached, there was a need for another continuing resolution to keep the government funded.  Earlier in the week, it was reported that there was a bipartisan agreement on a bill that would have funded the government and extended the first sunset date for the rare pediatric disease priority review voucher program for nearly 5 years, until September 30, 2029.  However, the bill ran into political challenges, and as the minutes ticked away until a potential government shutdown, the bill that was ultimately passed was stripped of many of the provisions that were originally included, such as the extension to the rare pediatric disease priority review voucher program.

This means that, at the current moment, FDA cannot award any priority review vouchers for rare pediatric disease product applications unless it is for a drug that was designated as a drug for a rare pediatric disease not later than December 20, 2024, and such application is approved not later than September 30, 2026.

Although this is a truly regrettable outcome of what seemed like a promising beginning to the week in this regard, this does not mean that all hope is lost.  Congress has since passed several of the bills that were originally stripped out of the continuing resolution, such as the bill that would transfer the land under RFK Stadium in DC to the DC government for the purposes of building a new football stadium (or other potential enumerated purposes).

Therefore, there remains hope that Congress could still act to extend the program.  As we mentioned in our previous blog post, and as stated by many other stakeholders, this program has been crucially important for rare pediatric disease product development, and it does not cost a single government dollar (although we do not wish to minimize the additional resources a priority review application demands).  If the program were to sunset completely, as currently scheduled, the impact on the development of drugs for rare pediatric diseases would be difficult to overstate.  Although FDA cannot currently award rare pediatric disease priority review vouchers to any applications not currently designated as a drug for a rare pediatric disease, there is no provision that prevents FDA from continuing to grant such designations.  We would strongly urge companies to continue to request, and FDA to continue to grant, such designations in the hopes that Congress can accomplish what it seemed ready to do on a bipartisan basis just a few days ago.  In the meantime, we encourage all stakeholders to keep the pressure on to get this done as soon as possible.

FDA recently released 510(k) Third Party Review Program and Third Party Emergency Use Authorization (EUA) Review which finalizes the draft guidance of the same title issued in December 2023.  We previously discussed the Third Party Review Program in a blog post last year when FDA mentioned its expansion as part of its plan to address the resource gap for review of laboratory developed tests (LDTs) under the LDT final rule.  The final guidance appears not to make any meaningful changes that are actually likely to support or incentivize its increased utilization, which is disappointing, although not unsurprising.

The final guidance looks much like the prior draft and is intended to satisfy FDA’s obligation to issue final guidance on consultations with persons under section 565(i) of the FD&C Act and also to provide clarity on use of third party emergency use authorization (EUA) review. The guidance also addresses FDA’s obligation to provide considerations on third party compensation, information sharing, and conflicts of interest.

Discussion of the early interaction (EI) consult policy and details of a third party review memo, which were previously described on the website, are now included within the guidance.  The guidance also clarifies the criteria for re-recognition of third party 510(k) review organizations and the suspension or withdrawal of recognition and discusses how FDA will audit the Third Party 510(k) Review Program as part of ongoing audit plans under the Quality Management and Organizational Excellence (QMOE) Program which are all Medical Device User Fee Amendments (MDUFA) IV and V commitments.

The Third Party Review Program for EUAs looks different compared to the Third Party Review Program for 510(k)s.  Whereas applicants interact directly with third party 510(k) review organizations, for EUAs, FDA will generally contract with the third party review organization and will send submissions it receives to the third party for review.  FDA may, in certain emergency situations, determine that in vitro diagnostic device EUAs may be submitted directly to the third party EUA review organization.  EUAs may only be submitted following a relevant declaration under section 564 of the FD&C Act justifying emergency use authorization of a product and, because such emergencies are not known, FDA will identify and contract with third parties based on expertise and skills needed in anticipation of or at the time of an emergency declaration.

While FDA may utilize third parties to review EUAs to lessen the burden on internal FDA resources during a public health emergency, this might not offer much in the way of advantage or assistance to a new Sponsors or FDA as compared to other programs put in place during the recent COVID-19 public health emergency.  In April 2020, the National Institutes of Health (NIH) launched the Rapid Acceleration of Diagnostics (RADx) to speed innovation in the development, regulatory authorization, commercialization, and implementation of EUA COVID-19 testing.  Sponsors who applied to the program were put through a highly competitive, rapid three-phase selection process to identify the best candidates for at-home (over-the-counter) or point-of-care in vitro diagnostic COVID-19 tests. All proposals underwent an initial technical, clinical, commercial, and regulatory review before receiving funding and in-kind service support.  Sponsors were provided a RADx interdisciplinary consulting team, including a regulatory consultant who worked closely with the FDA to ensure Sponsors were meeting the Agency’s expectations.  This was especially advantageous to Sponsors who had not previously taken a product through the FDA market authorization process.  The purpose of the RADx project team was to help Sponsors quickly accelerate past development hurdles, provide them with close partnerships with other regulatory agencies (e.g., FDA), and to generate data in a format that would streamline FDA’s review. The program led to 18 over-the-counter COVID-19 EUAs, 2 multiplex COVID/Flu EUAs, and supported De Novo and 510(k) submissions for over-the-counter COVID-19 and multiplex COVID/Flu assays.  A similar support program, instead of or in combination with third party review, could be instrumental in assisting manufacturers of LDTs to validate tests and de-risk regulatory authorizations.

As we have previously discussed, the Third Party 510(k) Review Program is not widely used.  We noted in last year’s post that in Fiscal Years 2018 – 2022, fewer than 100 510(k)s went through the Third Party Review Program annually. Fiscal Year 2023 showed similar performance.  The Agency has reportedly been trying to improve the program, as we discussed in 2018 and 2020.  However, the new final guidance does not appear to do anything to enhance the program or change it in a way that would be likely to lead to increased use by industry.  This appears to be yet another failed attempt to remediate a program that has long underperformed its potential.  As the Agency looks towards reviews of LDTs, a program similar to RADx may provide a better approach to assist manufactures and FDA in meeting the challenges to allow for review and authorization of LDTs.

We recently published the first part of our review of FDA’s draft guidance titled “Frequently Asked Questions – Developing Potential Cellular and Gene Therapy Products.” Questions and Answers Guidance (see previous coverage here).  In this post we focus in on the draft guidance document’s chemistry, manufacturing, and controls (“CMC”)-specific content.  In eight pages we get a string of high-level regulatory questions that provide a nice roadmap for CMC product development, which largely align with opportunities to engage with CBER as you progress through the development of cellular and gene therapies (“CGT”).

As you review these questions and answers, nothing that CBER provides in this guidance is “new.”  In fact, nearly all of the CMC comments are directing us to existing guidance documents.  This does not mean that there is no value in this recent publication. What can be gained from this new guidance from a CMC perspective is more nuanced.  The guidance documents that CBER has issued in recent years in the CGT space have been important steps forward.  Each provides high-level considerations for a field that spans a mind-boggling number of indications and therapeutic modalities that CBER is responsible for reviewing.  This is best exemplified by CBER’s description of characterization tests in this guidance:

The appropriate characterization tests depend on the unique features of the product type. For example, characterization testing of a cell-based product may include extended assessment of cell surface phenotypic markers, such as those associated with immune-cell activation, differentiation, and exhaustion. For adeno-associated viral vectors, examples may include characterization of non vector DNA impurities in capsids by next-generation sequencing, vector genome size analysis, and detection of capsid amino acid modifications by mass spectrometry. For tissue-engineered medical products, examples may include biomechanical testing to assess the ability of a vascular graft to tolerate repeat access without leaking, permeability testing to assess the characteristics of a skin graft, or cellular distribution throughout a cell scaffold construct.”

This broad span of products can limit CBER’s ability to give meaningful details or examples in guidance, leaving the Center to make more general recommendations:

• “FDA recommends that sponsors evaluate a number of product characteristics during early clinical development to help identify and understand CQAs”
• “There is no fixed number of lots recommended for PPQ. In general, a greater understanding and knowledge of the product and manufacturing process can reduce the number of PPQ lots that should be sufficient to qualify the performance of the manufacturing process.”

If you make a tissue product you may produce one lot per patient where a gene therapy may only need a handful of lots through Phase 3.  It is harder to execute full testing programs on lots containing one unit.  As a result, how you approach your PPQ will be drastically different.

Key takeaway for CMC:  What makes a successful CMC section for an IND or BLA looks very different for every development program.  In this draft guidance, CBER is walking sponsors through the options available to them to ask program-specific questions as sponsors will only get one shot at some meeting types (INTERACT, Pre-IND, Pre-BLA). It is important that sponsors do not miss an opportunity to engage with CBER on CMC topics. This is even more so in rare disease CGT programs where clinical development can be more streamlined, so CMC product development is expected to happen at a more rapid rate.  This new guidance will help ensure that sponsors get the most out of their interactions with CBER by ensuring they do not have major blind spots.  From there, it is up to sponsors to take every opportunity to ask product-specific CMC questions to CBER.  As this and other CGT guidance documents illustrate, there is no one-size-fits-all approach to CMC.

Administrative Law Judge (“ALJ”) John Mulrooney conducted a prehearing conference hearing on Monday, December 2nd, to kick off the public hearing on the Department of Justice’s (“DOJ’s”) notice of proposed rulemaking (“NPRM”) to reschedule marijuana.  The NPRM seeks to reschedule marijuana from schedule I of the federal Controlled Substances Act (“CSA”) to schedule III.  The DEA Administrator issued a General Notice of Hearing fixing December 2nd as the commencement date for the hearing.

The purpose of the public hearing “is to receive factual evidence and expert opinion testimony” on whether marijuana should be rescheduled to schedule III.  Prehearing Ruling (Dec. 4, 2024), at 1.  Last week’s prehearing conference set the parameters for the hearing on the merits, scheduled to begin January 21, 2025.  Judge Mulrooney’s prehearing ruling establishes the schedule for the parties’ presentations and established hearing guidelines.  Parties will have ninety minutes to present the testimony of their witness.  Counsel may present a two minute opening statement about their witness and the proposed exhibits that will be sponsored through the witness.  The prehearing ruling encourages parties “to consider whether there is merit in consolidation with other participants that have similar (or complimentary) litigation objectives, witnesses, and/or areas of interest.  Id. at 2.  Consolidated parties are allowed to present testimony of up to two witnesses during the hearing, a presentation up to 120 minutes.  Id.

At the conclusion of a party’s presentation, counsel or the designated representative for the party may present either a ten minute closing argument or submit a brief of up to twenty-five pages within five business days of their witness’ presentation.  Id.  Witness cross-examination will be limited to matters covered on direct examination, but if a party submits an affidavit or letter into evidence from a witness who also testifies in person, cross-examination as to matters referenced in the document may be permitted even if the witness does not refer to them during their direct testimony.  Cross-examination will be limited to twenty minutes for each party on the opposing side.  Id. at 3.

The parties have noticed their intentions to offer into evidence documents they identified in their prehearing statements and must serve each other with a copy of the documents noticed in their prehearing statements no later than January 3, 2025.  Parties are required to lay a foundation “for recognition as an expert” and for every proposed exhibit as a condition precedent for inclusion in the record.  Id.  A limited number of affidavits may be received into the record subject to the evidentiary weight adjustment specified in the regulations.  Id. at 3-4.

The court consulted the parties as to availability of their representatives and witnesses.  A party scheduled to present a witness must be physically present in the courtroom even if the witness appears via video teleconference.  A representative seeking to cross-examine an opposing witness must also be physically present.  Id. at 5.  The hearing on the merits commences January 21st with proceedings each Tuesday-Thursday, except for the week of February 10th, through March 6th.

We learned earlier this week that an allision (a runner-up to Merriam-Webster’s 2024 Word of the Year, polarization) may be poised to occur—perhaps within a fortnight (another runner-up to Merriam-Webster’s 2024 Word of the Year thanks to Taylor Swift)—as Congress considers various pieces of healthcare legislation as part of its year-end package.  As part of that package, we understand that discussions on the latest iteration of the “Bringing Low-cost Options and Competition while Keeping Incentives for New Generics Act” (“BLOCKING Act”) (also known as the “Expanding Access to Low-Cost Generics Act”) have resurfaced and could potentially hit the generic industry.  (Unless the legislative ship can be steered away.)

We’ve railed against passage of the BLOCKING Act since February 2018 when it was made as a legislative proposal in the first Trump Administration’s Proposed Fiscal Year 2019 Budget (pages 22 and 51)—including in blog posts (here, here, here, here, and here) and in Congressional testimony—as antithetical to a primary goal of the Hatch-Waxman Amendments: getting high quality, low-cost generic drugs into the hands of consumers—fast.  After all, the BLOCKING Act would significantly alter the ANDA Paragraph IV 180-day exclusivity incentive.  Specifically, it would further dilute the 180-day exclusivity incentive by amending the Paragraph IV 180-day exclusivity statutory provisions at FDC Act § 505(j)(5) to place new conditions on when a subsequent Paragraph IV ANDA can be approved notwithstanding a first applicant’s eligibility for 180-day exclusivity.

In our May 2023 B-B-B-B-Bad to the Bone post, we highlighted some changes to the original version of the BLOCKING Act, restyled as the Expanding Access to Low-Cost Generics Act of 2023, intended to guard against a subsequent Paragraph IV ANDA gutting the 180-day exclusivity incentive and that would somewhat blunt the negative effective of the legislation.  But we’ve made no bones about our take on BLOCKING and its progeny: “That being said, it’s kind of like putting lipstick on a pig.  In the end, the “Expanding Access to Low-Cost Generics Act of 2023” (S. 1114) is still the BLOCKING Act, and it is still bad to the bone.”

Based on what we’ve heard from the talk on Capitol Hill, the latest version of the BLOCKING Act that is poised for introduction in Congress within the next few days is the same language proposed for inclusion in the never-passed “Food and Drug Administration Safety and Landmark Advancements Act of 2022.”  That’s the version we dissected here, and that is available here.

Given that we’ve already covered the version of the BLOCKING Act apparently on tap for congressional consideration, we won’t do so again here.  But we thought a clarion call would be appropriate now.  After all, as we’ve said before—and it bears repeating over and over again—what generic drug companies would be willing to invest millions of dollars in generic drug development and patent challenges for the potential of a hollow exclusivity incentive?  More ANDA approvals does not necessarily translate into more launches.  Over time, a new exclusivity regime for Paragraph IV ANDAs may mean fewer ANDA approvals and launches.  And that ultimately means more drug shortages of critical medicines, fewer choices for consumers, and higher costs to the U.S. healthcare system.

On Wednesday, December 11, Hyman, Phelps & McNamara, P.C. (HPM) and Riparian LLC will co-host a webinar on an important CMS rule imposing penalties for misclassification of drugs and other reporting errors under the Medicaid Drug Rebate Program.  (See our post on this rule here.)  The Webinar will explore the CMS rule and provide actionable recommendations for manufacturers on how to navigate the new requirements.

Date:  Wednesday, December 11, 2024

Time:  12:00 PM to 1:15 PM ESTfda

Presenters:

•  Alan Kirschenbaum, Director, HPM
•  Jennifer Lospinoso, Managing Director, Riparian LLC
• Lynn Buhl, Managing Director, Riparian LLC

Please click here to register.  Once you register, you’ll receive instructions by email on how to access the webinar.  We hope you’ll join us!

On Wednesday, December 11, Hyman, Phelps & McNamara, P.C. (HPM) and Riparian LLC will co-host a webinar on an important CMS rule imposing penalties for misclassification of drugs and other reporting errors under the Medicaid Drug Rebate Program.  (See our post on this rule here.)  The Webinar will explore the CMS rule and provide actionable recommendations for manufacturers on how to navigate the new requirements.

Date:  Wednesday, December 11, 2024

Time:  12:00 PM to 1:15 PM EST

Presenters:

• Alan Kirschenbaum, Director, HPM
• Jennifer Lospinoso, Managing Director, Riparian LLC
• Lynn Buhl, Managing Director, Riparian LLC

Please click here to register.  Once you register, you’ll receive instructions by email on how to access the webinar.  We hope you’ll join us!

On November 19, 2024, FDA released a draft guidance titled “Frequently Asked Questions – Developing Potential Cellular and Gene Therapy Products.”  As much of the content of this draft guidance for cellular and gene therapy (“CGT”) products is articulated elsewhere, this document serves as a one-stop shop or “Cliffs Notes” for the numerous guidance documents now covering CGT product development.  However, as your high-school literature teacher warned you—to ace the test, you need to read the book, ahem, source regulations, guidance, or other policy documents.

CBER’s approach here was to take FAQs from across sponsor interactions, public workshops, email requests, etc. and create a new guidance to help CGT sponsors more efficiently find their way to the correct answers.  The draft guidance includes FAQs covering topics from across disciplines: regulatory review; chemistry, manufacturing, and controls (“CMC”); nonclinical and pharmacology/toxicology (“PT”); clinical; and clinical pharmacology.  Because this guidance covers such a breadth of information, for Part 1 of our coverage, we will focus on the non-CMC topics and summarize our top takeaways from each section, something of a Cliffs Notes for the Cliffs Notes.

Section #1: FDA Interactions

Given the wide range of sponsors (i.e., academic to industry) involved in developing CGTs, the guidance starts by summarizing some of the fundamentals of opening an IND.  This summary covers everything from format and contents of INDs to their submission and use of the Electronic Submissions Gateway to cross-referencing other applications to FDA’s review of the IND and the associated timelines.  While this section is emblematic of the breadth of coverage of this guidance, it is particularly helpful for any sponsor who is looking to submit an IND for the first time, academic sponsors, and entities who partner with academic sponsors.

Interestingly to us, the draft guidance attempts to again clear up a common source of confusion by describing the differences between INTERACT and pre-IND meetings.  Here, the draft guidance states that the appropriate timing for an INTERACT meeting should be when a sponsor has identified a specific product and has conducted some preliminary proof-of-concept (“POC”) studies but has not yet designed and conducted definitive toxicology studies.  CBER had previously, as recently as July 2024 in its SOPP on regulatory interactions with sponsors (SOPP 8101.1), described that an INTERACT meeting may be appropriate when a sponsor has identified a “specific investigational product or product-derivation strategy to evaluate in a clinical study before requesting an INTERACT meeting” (emphasis added).  In contrast to the scope for INTERACT meetings, the draft guidance describes an example of when a pre-IND meeting would be appropriate as being when the sponsor has completed POC and possibly some preliminary nonclinical safety/toxicology studies and desires to move to the definitive toxicology studies.  The distinction between the INTERACT and pre-IND meeting and the potential narrowing of the scope for INTERACT meetings appears to have moved these two meeting types closer together on the continuum of product development timelines.  It also appears to have continued to shift the focus away from degree of CMC-readiness, although our experience tells us that this continues to be a consideration in CBER’s review of INTERACT meeting requests.

The draft guidance also describes pre-BLA meeting considerations, noting that FDA “strongly recommends” scheduling one.  The draft guidance states that only one 90-minute pre-BLA meeting will typically be granted for a specific product or indication planned for an original marketing application.  Such meetings should also be multi-disciplinary, not discipline-specific.  The draft guidance states that a pre-BLA meeting request should be submitted at least 4 months before the anticipated BLA submission.  The draft guidance recommends that no more than 15 questions are included in the briefing package.  CBER will not commit to reviewing packages greater than 250 pages.

For the many CGT programs intended for rare disease indications, we have found there is immense value in “socializing” pivotal data (whatever “phase” of study they may come from) prior to a pre-BLA meeting. This could occur during an End-of-Phase 2 (“EOP2”) meeting if a Phase 2 study is expected to provide primary evidence of safety and effectiveness.  Even if an EOP2 meeting has occurred, it may help to have a focused clinical/statistical discussion of study results following Phase 3, as an “EOP3” meeting.  This highlights the opportunities that exist for engaging with FDA beyond the opportunities explicitly acknowledged in guidance.

Section #2: Nonclinical Studies

As CBER has indicated in other guidance documents regarding considerations for nonclinical investigations, designing a nonclinical program is highly product and indication specific, which makes uniform design recommendations difficult.  Instead, this guidance highlights questions about species, animal model, and product selection for nonclinical programs as well as several aimed at helping to understand the purpose and importance of POC, toxicity, and biodistribution studies. There is even a tip of the hat to alternative (non-animal) test methods, which have become powerful methods for the assessment of the potential for off-target toxicity and unintended genome editing. To us, some of the most helpful information provided pertains to selection of animal species and the design of pharmacology and toxicology studies, with the  discussion of considerations that are unique to either cellular products or gene therapies.

The draft guidance enumerates key considerations for selecting an animal species for both pharmacology and toxicology studies.  These considerations consist of (1) whether the investigational CGT product is pharmacologically active in the species, (2) the technical feasibility of using the intended clinical delivery device or procedure, (3) comparability of the physiology and anatomy, and (4) the sensitivity of the selected species to potential toxicities.  Additional specific considerations for cell therapies include the ability of the species/strain to support survival and engraftment or availability of an appropriate analogous animal product.  Specific considerations for gene therapies include the susceptibility of the species to the vector, the vector transduction profile, and the pharmacological response to the vector and expressed transgene.

The draft guidance also directs sponsors to consider the biological relevance of a particular animal or disease model for pharmacology studies.  Factors related to the relevance of an animal or disease model to a target patient population include (1) progression of the disease phenotype or injury, (2) the lifespan of each model, (3) the similarities and differences between the animal model and the proposed patient population, (4) the timing of product administration relative to disease onset and progression, and (5) the relevant anatomy and physiology related to the delivery method and target anatomic site(s).  If there is no available animal model, the sponsor should provide supporting data from other sources, which can include in vitro studies, in silico studies, in vivo studies using an analogous animal product, and relevant data from studies evaluating a related product or indication.

Shifting from pharmacology, the draft guidance offers input on design of toxicology studies.  Because many CGT products are single-dose administration products, the duration for pivotal toxicology studies evaluating such a product should be informed by the biodistribution and persistence profile of the investigational product.  The draft guidance describes various methods to assess either cell distribution for cell therapy products or vector biodistribution for gene therapy products.  For cell therapy products, the draft guidance notes that in vivo imaging techniques provide certain advantages.  For gene therapy products, the use of quantitative and sensitive assays such as qPCR are recommended.  Where vector presence is detected, transgene mRNA and/or protein expression levels should also be measured.

Section #3: Human Trials

Finally, the guidance provides a quick overview of clinical study recommendations. Here, CBER focused on high-level questions about study design, providing substantial evidence of effectiveness, endpoint selection (including differences between clinical and surrogate endpoints), and assessing safety in CGT clinical programs.  The draft guidance recommends, when feasible/ethical, the use of a placebo/sham concurrent control, active concurrent control, or dose-ranging concurrent control, as opposed to no-treatment concurrent control or external control, though no guidance is offered as to when such controls are feasible or ethical.  Next, sponsors should consider no-treatment control.  However, the draft guidance notes that in some cases, such as with rare diseases that have a natural history that does not spontaneously improve, a well-conducted natural history study may serve as an acceptable external control.

Consistent with both previous guidance and CBER’s approval decisions and recommendations to sponsors, the draft guidance recommends that for rare diseases, sponsors should consider designing their FIH study to be an adequate and well-controlled clinical study so that it may contribute to meeting the substantial evidence of effectiveness standard or even “serve as a pivotal study to support approval.”  The draft guidance also notes that clinical outcomes in early phase studies could provide confirmatory evidence of effectiveness.

The discussion of endpoint selection, especially with respect to accelerated approval, caught our attention.  It was quite notable to us that, while the guidance mentions both surrogate endpoints and intermediate clinical endpoints, the latter received little attention.  The discussion focused almost entirely on distinguishing clinical and surrogate endpoints, explaining considerations for selection of biomarkers as surrogate endpoints, and the strength of evidence needed to support a surrogate endpoint.  On the other hand, CBER provided no additional guidance as to when a clinical endpoint would be appropriate as an intermediate clinical endpoint to support accelerated approval.  However, CBER just recently granted (to our knowledge for the first time) an accelerated approval based upon an intermediate clinical endpoint (see the November 13, 2024 approval of the gene therapy, Kebilidi).

For safety, the draft guidance emphasizes that close monitoring of subjects immediately after product administration is critical to capture early safety signals for CGT products.  FIH studies should generally employ staggered enrollment and treatment to identify potential safety issues before dosing the next subject.  The staggering interval should be long enough to monitor for acute and subacute adverse events based on observations in animal studies or previous human experience with related products.  Clinical studies of CGT product should have well-designed stopping rules to assure that risks remain reasonable.  Such stopping rules should specify the number of adverse events, as well as the nature/severity of these events, which would trigger such a determination.

Our Concluding Thoughts

While much of this new FAQ guidance reiterates policies and interpretations of FDA’s legal and regulatory authority that are described elsewhere, sponsors will likely find this document helpful for its effective summation of a large breadth of information.  Perhaps, this guidance is best used as a first step before searching across the many and various documents it aims to summarize.  The draft guidance contains a lengthy references section citing to 39 other guidance and procedure documents, not to mention the numerous statutory and regulatory provisions cited throughout, indicating the breadth of sources summarized in this one document.  While the much of the benefit of the guidance comes from its utility as one-stop source of information, its discussion of topics like the narrow distinctions between pre-IND and INTERACT meetings may still be helpful to sponsors, even if this new discussion seem, to us, to push further into development the potential first window during which a CGT product sponsor could interact with CBER.

It is also worth noting that the draft guidance reinforces CBER’s view that sponsors should consider how to maximize the potential for early phase studies to contribute to substantial evidence of effectiveness as one of two adequate and well-controlled studies, as confirmatory evidence, or even as the pivotal study to support a marketing application.  As such, particularly for rare diseases, it is important for sponsors to assess efficacy in these studies, even if only pharmacodynamic measures can be adequately measured. All the while, this efficiency in clinical development requires accelerating CMC by having early-stage studies serve as large stage studies.  However, as we noted above, the CMC topics covered in this draft guidance will be covered in Part 2 of this blog coverage.  Stay tuned for the next iteration of the Cliffs Notes to the Cliffs Notes.

On August 30, 2024, we posted on what was then the most recent version of S. 142, the Preserve Access to Affordable Generics and Biosimilars Act.  Some version of the bill, which addresses patent settlement agreements (pejoratively referred to as “reverse payment agreements” by their opponents), has been floating around in Congress for the better part of two decades—even before the U.S. Supreme Court declined to hold, in FTC v. Actavis, Inc., 133 S. Ct. 2233 (2013), that so-called reverse payment settlement agreements are presumptively unlawful.

As we noted in our prior post, S. 142 includes some new provisions (compared to previous iterations of the bill) to expressly provide for the Federal trade Commission (“FTC”) to obtain forfeiture and civil penalties in an administrative proceeding initiated by the Commission.  In particular, the bill would amend the FTC Act (15 U.S.C. 44 et seq.) to add new Section 27(e), titled “Penalties,” stating:

(1) FORFEITURE.—Each party that violates or assists in the violation of this section shall forfeit and pay to the United States a civil penalty sufficient to deter violations of this section, but in no event greater than 3 times the value received by the party that is reasonably attributable to the violation of this section. If no such value has been received by the NDA holder, the biological product license holder, the ANDA filer, or the biosimilar biological product application filer, the penalty to the NDA holder, the biological product license holder, the ANDA filer, or the biosimilar biological product application filer shall be sufficient to deter violations, but in no event shall be greater than 3 times the value given to an ANDA filer or biosimilar biological product application filer reasonably attributable to the violation of this section. Such penalty shall accrue to the United States and may be recovered in a civil action brought by the Commission, in its own name by any of its attorneys designated by it for such purpose, in a district court of the United States against any party that violates this section. In such actions, the United States district courts are empowered to grant mandatory injunctions and such other and further equitable relief as they deem appropriate. . . .

(3) CIVIL PENALTY.—In determining the amount of the civil penalty described in this section, the court shall take into account—

(A) the nature, circumstances, extent, and gravity of the violation;

(B) with respect to the violator, the degree of culpability, any history of violations, the ability to pay, any effect on the ability to continue doing business, profits earned by the NDA holder, the biological product license holder, the ANDA filer, or the biosimilar biological product application filer, compensation received by the ANDA filer or biosimilar biological product application filer, and the amount of commerce affected; and

(C) other matters that justice requires.

We raised the possibility that these civil penalty provisions—likely viewed by proponents of the legislation as hallmark provisions—may be the legislation’s death knell in light of the Supreme Court’s decision in SEC v. Jarkesy, 144 S. Ct. 2117 (2024) (see our previous post here), in which the Court “ruled that the Securities and Exchange Commission (SEC) may not impose fines to penalize securities in its administrative proceedings because that practice violates the Seventh Amendment ‘right of trial by jury’ in all ‘suits at common law.’”  Specifically, we commented that:

The Preserve Access to Affordable Generics and Biosimilars Act (S. 142) cannot be squared with Jarkesy’s interpretation and application of the Seventh Amendment. . . .  [T]he bill expressly provides for the FTC to obtain civil penalties—the exact type of claims the Supreme Court held are subject to Seventh Amendment protections—without a jury trial at any step of the process.  Rather, the bill is structured so that liability is fully determined by an Administrative Law Judge (“ALJ”) in an administrative proceeding without a jury, with “conclusive” factual findings made by that ALJ.  Then, in a follow-on action in court to impose civil penalties, the liability findings made by the ALJ are treated as “conclusive” and a judge—not a jury—assesses penalties in a bench trial.

That structure directly conflicts with the Supreme Court’s holding in Jarkesy.  First, S. 142 removes the jury entirely from both steps of its delineated process for assessing civil monetary penalties.  Second, by having an ALJ “conclusively” determine liability—and without a jury—it impermissibly takes away from the jury its core function of finding facts.  Just as it is unconstitutional to side-step the jury in an action seeking civil penalties for fraud (as in Jarkesy), so too is it impermissible in an action seeking civil penalties for unfair competition.  Both types of claims are analogous to common-law claims that fall squarely within the scope of Seventh Amendment protections.

Of course, a lot has happened since our August 2024 post.  Not only has a challenge been lodged against FDA in the Central District of California over the Agency’s civil money penalty authority based on Jarkesy (see our previous post here), but a new Administration—and one with a likely very different view of the FTC than the Biden Administration—is on the horizon.  Nevertheless, we are where we are at the moment and Congress is pressing on for passage of the Preserve Access to Affordable Generics and Biosimilars Act . . . and, based on a discussion draft we understand has been circulating on Capitol Hill, that introduces some even newer provisions to the bill.

The heightened discussion concerning Jarkesy and the Preserve Access to Affordable Generics and Biosimilars Act has even caught the attention of a Federalist Society panel.  Indeed, in a recent Federalist Society-sponsored webinar, titled “Does Jarkesy Doom the Preserve Access to Affordable Generics and Biosimilars Act?,” moderator Brian Pandya (Duane Morris LLP) hashes out the interplay between Jarkesy and The Preserve Access to Affordable Generics and Biosimilars Act with Matthew S. Hellman (Jenner & Block), William M. Jay (Goodwin Procter LLP), and Prof. Emily Michiko Morris (The University of Akron School of Law).

While we recommend that folks view the webinar video in its entirety, below are some key comments from the panelists worth noting (to be clear, the Federalist Society simply organized this independent panel of experts with varying opinions and does not take an official view on these issues):

Emily Michiko Morris: “This brings up the Preserve Access Act, which was actually introduced back in 2006 . . . A lot has happened since then of course.  In particular, the Supreme Court has weighed in fairly definitively in its 2013 decision in FTC v. Actavis.  For those of us who study the patent system and in particular the pharmaceutical industry and its use of patents, this raises the question of whether the Preserve Access [Act] is even relevant anymore.”

Matt Hellman: “What that means going forward is that if you happen to be aware of any agency enforcement scheme that allows for civil penalties, and we’ll talk about one that’s in the Act today, there’s a big question of whether or not that’s allowed anymore after the opinion striking down the SEC enforcement scheme in Jarkesy . . . Jarkesy is the lens through which we need to understand and assess what’s going on with the [Preserve Access] Act.”

Willy Jay: “Looking at this through the lens of Jarkesy, does the fact that you have an Article III judge come in at the end of the process change the way we look at this for Seventh Amendment purposes?  I would argue that the answer is no.  If this is a cause of action for civil penalties, it is one that should be treated the same way as in Jarkesy . . . [In the FTC proceedings,] you are certainly never getting an adjudication compliant with the Seventh Amendment . . . nowhere in the ALJ, the FTC, the Court of Appeals, or the district court are you getting a jury.”

Matt Hellman: “Agency findings can’t be a preclusive input into . . . [the Article III] process . . . It’s especially the case talking about treble damages,” which are “the kind of [damages] that the modern court . . . says needs to be awarded by a jury . . . .” “The Act as written is probably not going to fly.”

Emily Michiko Morris: “What’s happened is that the FTC requires that these cases submit their settlement terms to the FTC for review . . . The FTC in a 2020 report . . . reported that the vast majority of settlements . . . involved these kinds of early generic terms . . . I think this is probably the reason that the FTC has stopped publishing these reports . . . Overall, the effect has already been what the Preserve Access Act was presumably hoping to accomplish.”

. . . . And a shout-out to Matt Hellman who provided us with the headline for this post: “If you’ve got legitimate suspenders, don’t have an unconstitutional belt.”

Finally, we want to note one additional comment from Willy Jay.  He commented that “[m]ost agencies when they pursue civil penalties have to refer civil penalty actions to the Attorney General.  The FTC has chipped away at that . . . this legislation would allow the FTC to skip that entirely and give the FTC complete authority to pursue civil penalties . . .  You could in theory have a situation where a holdover FTC brings an action for civil penalties for violating federal law that the chief law enforcement officer of the United States does not think is a legal violation.”

Willy’s comment highlights another constitutional issue that we believe arises from the current discussion draft of the Preserve Access to Affordable Generics and Biosimilars Act circulating on Capitol Hill.  That is, that the FTC may be granted the authority to run to district court without consulting the Department of Justice.  If true, that’s a pretty significant development . . . . though perhaps not a scenario we are likely to see under the 47th President.